LASHKAR GAH, Afghanistan (Reuters) - Afghan government troops say they have fought Taliban forces to a standstill outside the capital of southern Helmand province, but the city remains surrounded after the insurgents launched one of their most brazen offensives.

A center of illicit opium production as well as a traditional Taliban stronghold, Helmand has been one of the areas that suffered the most violence in the insurgents’ battle to topple the Western-backed government in Kabul.

In recent weeks, Taliban fighters battled their way into the outskirts of Lashkar Gah, the provincial capital, in an attack that was only blunted after hundreds of Afghan commandos were airlifted into the area.

Now officials on both sides say heavy casualties have forced the Taliban to regroup.

“Our forces, backed by foreigners, have killed hundreds of Taliban fighters during night raids in the last 24 hours,” said General Wali Mohammad Ahmadzai, commander of the army’s 215th Corps in Helmand.

Afghan soldiers and police, in some cases aided by American air strikes and special forces advisers, are now working to try to push the Taliban back from the city limits, said senior police official Mohammad Hakim Hangaar.

The Taliban does not have a new plan to overrun the city, but intends to “keep it under siege as long as possible,” said one Taliban commander, who asked not to be named for his own security.

Taliban leaders threw into the attack on the city hundreds of fighters from neighboring provinces, but many of them were killed or injured in weeks of heavy fighting, said another Taliban commander.

Last week up to 100 soldiers and police were killed in a series of ambushes as they tried to escape to the provincial capital from positions encircled by the Taliban for days.

The NATO-led military coalition has several hundred troops based in Helmand. The troops, mostly American, are largely confined to an advisory role but U.S. air strikes have been used to help the Afghans.

General John Nicholson, the top commander of U.S. and coalition troops in Afghanistan, has vowed to do everything to keep Lashkar Gah from falling to the Taliban.

But some Afghan elders have questioned if the efforts are sufficient, as thousands of residents have fled the latest fighting and Taliban control or contest most of the province.